'What choice do we have?': SA Premier grapples with mounting demands for taxpayer bailouts

Australia Broadcast Center

2 days ago

Who deserves a lifeline?
That's the awkward question Premier Peter Malinauskas has been fielding during an eventful first week back from annual leave.
In the government's view, the Whyalla steelworks and its more than 1,000 employees certainly fall into the deserving category.
On Wednesday, the Premier announced the state government would stump up another $137.5 million to keep the steelworks running through its government-enforced administration process.
That's on top of $192 million the government had already allocated to keep the steelworks afloat, bringing the total state contribution to $329.5 million. The Commonwealth has pledged an equal amount.
Wednesday's extra funding, while lower than expected, is still a hefty chunk for a state government that's flagged it has limited capacity to fund major projects due to rising debt levels.
And the steelworks are not the only ones in need of help.
The Port Pirie lead smelter, which employs about 900 people on the Spencer Gulf, is losing tens of millions of dollars a month, according to owner Nyrstar Australia.
The company, which also owns a zinc smelter in Hobart, is negotiating with the state and federal governments over a support package that could be worth hundreds of millions of dollars.
Then, on Thursday, it was revealed SA's largest disability employment provider, Bedford Industries, was on the brink of administration — raising fears for the future of 1,400 people with disability.
In both situations, the SA Premier has indicated the state government is ready to help with public money if need be.
But does this set a precedent for every business or industry that is struggling? Asked this on Wednesday, the Premier said: "Well, what choice do we have?"
"I think we have to be balanced and careful in the approach that we take and deliberate in our considerations," he said.
"But I don't think there's anybody seriously suggesting that we should allow Port Pirie or Whyalla or our farmers or for people operating our coastline [affected by the algal bloom] just to be left to rack and ruin — that's not my view.
"Governments have always played a role. Whenever there's been a crisis or a challenge, people turn to government, and that's a responsibility you have to be willing to take on."
On Friday, after the Bedford situation came to light, Mr Malinauskas said: 'It's not my DNA just to sit back and watch a group of vulnerable people potentially be left in a situation where they're more vulnerable than they are already".
James Hancock, deputy director of the University of Adelaide's SA Centre for Economic Studies, said the situations with Whyalla, Port Pirie and Bedford had left the government "between a rock and a hard place".
He said government intervention to save a business meant "you then potentially have a queue of other businesses approaching you for support when they're in difficulty".
"The state budget can afford to do it for an extended period, but the real issue is if you're doing this for an extended period, what are you doing for other sectors that come under pressure?" he said.
"If it's not just Whyalla [and] you sort of end up with five, 10 sectors that need a lot of help on an ongoing basis, then that actually starts to become a really large budget burden.
"There's a tension there and there's no easy answer."
South Australia is not short of examples of what happens when a long-standing industry collapses and there is no white knight to save it.
The death of the car manufacturing industry left its mark on Adelaide following the closure of Mitsubishi in 2008 and Holden in 2017.
Meanwhile, the end of coal mining in Leigh Creek in 2015 saw that town's population shrink from 2,000 residents to just 100.
Mr Hancock said the stakes were particularly high for regional cities that were reliant on a major employer.
"Holden was located in the Adelaide metropolitan area … and people that were displaced from Holden in many instances were able to get employment elsewhere," he said.
"If you think about the house values of those workers, there was no sort of real impact of any significance.
"If you compare that with Whyalla, and if you had a situation where half the town was out of work and having to leave a job, it becomes almost impossible for people to sell housing.
"The human consequences of a Whyalla closure would really be very large."
That's the case Port Pirie Mayor Leon Stephens is now making amid the troubles associated with the Nyrstar plant.
Mr Stephens, who is also a Liberal Party candidate at the 2026 state election, said the closure of the Port Pirie smelter would cause economic "devastation".
"My perception of what a government should be doing, it should be looking after all sectors of community," he said.
"When you've got … a major employer in a city and that person is struggling and it looks like it will bring the city to its knees, I think there's definitely a catalyst [for intervention]."
The Premier was asked on Wednesday where he drew the line on whether to give an industry a bailout.
He said it depended on "whether or not there's a future" for the industry in question.
"While it is true that there's creative disruption in the marketplace all the time and we see businesses that's better years are past, the question is what are the years in front of us," he said.
"Unless you can see a future, then maybe you have to say, 'look, something hit the fence and that's life'.
"But for steelmaking … we know this country needs steel, for critical minerals [like at Port Pirie], the demand is going up not down.
"So, there are futures there that are worthy of contemplation."